Health Insurance. Just thinking about it makes my blood pressure rise a few points. It probably does the same to you. Health insurance stresses out everyone, especially small businesses and their employees. Every year, the number one requested member benefit the CCCBA is asked for is a group health insurance policy. We would love to be able to provide health insurance, and every year we try. Crazy as it sounds, under the existing statutory scheme it will not happen. This month’s Healthcare theme of the magazine seemed like a great backdrop to explain why health insurance is not among the many member benefits the CCCBA offers, as much as we want to provide it.
In short – we cannot offer health insurance as a member benefit because no carrier will provide it. Back in the1990’s, the state legislature passed AB1672 (Small Group Reform), which, for the most part, eliminated Association medical plans. In order to provide health insurance, the enrolled membership in the medical plan has to be at least 1,000 lives, excluding dependents. Although our entire membership is approximately 1,700, not all would enroll. Prior to AB1672, a carrier could deny coverage to a group at its discretion. Now, any carrier doing business in California has to cover a group with 2-49 employees no matter what health conditions any person in that group has. Solo practitioners are not required to be covered.
Since the carriers have to cover groups with 2 to 49 employees no matter what the risk is, no carrier is willing to take on the additional risk of offering Association plans if they don’t have to. Adverse selection is built into Association plans. Understandably, those with medical conditions flock to Association plans, because decent coverage is not available to them in the market place. Big claims means big premiums, and then those that can obtain cheaper coverage in the marketplace leave the plan. The carriers reason that eventually only uninsurable individuals are left on the plan. The carrier can’t make money on Association plans. Since carriers are not required to offer Association plans, they don’t.
There are some associations out there that do provide health insurance to their membership, but that is either because of their size or because they were grandfathered in. The sad reality is that much like many individuals, when it comes to coverage, associations like the CCCBA are at the mercy of the health insurance industry. Rest assured, we are constantly reviewing this issue. The second we are able to offer health insurance to our membership, we will do it.
- Kathryn Schofield, owner of the Schofield Law Group, focuses her practice on Elder Law, Conservatorships, Estate Planning and Probate/ Trust Administration – www.schofieldlawgroup.com
 This information comes directly from our insurance broker at Myers Stevens.
Filed Under: President's Message